Loan market shut by sanctions squeezing Finances: Russia Credit

MOSCOW (MRC) -- Russian companies are facing a squeeze in funding as sanctions targeting industries smother lending to all borrowers, including those that aren’t blacklisted, said Bloomberg.

"As long as those sanctions measures remain in force, one anticipates there will be very little international lending,” Philip Hanson, an associate fellow at the Chatham House research group in London, said yesterday by telephone.

Syndicated loans plunged 53% this quarter from a year earlier to USD2.68 billion, the lowest level in at least five years, according to data compiled by Bloomberg. Coal miner Siberian Anthracite’s USD250 million deal was the only international one signed this month, the smallest number for any September since at least 2008.

Banks are weighing the consequences of doing business with Russia after BNP Paribas SA was fined a record USD8.97 billion in June for circumnavigating U.S. embargoes on Sudan, Iran and Cuba. Dutch lender ING Groep NV pulled out of a loan sought by Techsnabexport JSC even though the Russian nuclear exporter isn’t among companies targeted by the penalties, two people familiar with the matter said Sept. 12.

The ING decision came about a month after U.S. and European Union sanctions on VTB Group prevented the second-biggest Russian bank by market value from signing a USD1.5 billion loan with a syndicate led by Barclays Plc.

Swiss energy trader Vitol Group’s plan to raise USD2 billion to buy oil from state-owned producer OAO Rosneft was put on hold after the world’s largest publicly traded oil producer by volume was slapped with U.S. sanctions on July 16, according to two people familiar with that transaction.

The U.S. and Europe widened penalties in July after travel bans and asset freezes aimed at President Vladimir Putin’s inner circle failed to end the conflict in Ukraine. The sanctions, which target Russia’s biggest state-run banks, energy companies and defense firms, block lending for public-sector investment projects and prevent targeted companies including OAO Gazprombank and OAO Novatek from accessing equity or debt markets for new long-term financing.
MRC

MOSCOW (MRC) - Imports of polyethylene (PE) in Kazakhstan decreased by 17% in the first eight months of this year.
The fall in demand occurred for high density polyethylene (HDPE), whereas the need for other types of polyethylene increased significantly, according to MRC analysts.

August PE imports in Kazakhstan declined to 11,700 tonnes, compared with 12,500 tonnes in July, largely because of reduced export quotas from Russian producers. Total PE import in the country decreased to 66,600 tonnes in January - August 2014, compared with 80,500 tonnes year on year. Demand for HDPE decreased almost by a quarter, in particular, from local pipe producers, whereas the demand for linear low density polyethylene (LLDPE) and low density polyethylene (LDPE) continues to grow.

Structure of PE supply over the period under review was as follows.

August HDPE imports decreased to 9,200 tonnes, compared with 9,600 tonnes in July. Local companies did not manage to offset the reduction in the supply of Russian HDPE by the increase in the imports from other countries. Total HDPE imports in the country decreased to 50,400 tonnes in the first eight months of this year, compared with 68,100 tonnes year on year. More than 80% of the total HDPE consumption in Kazakhstan occurred for pipe producers. The share of Russian HDPE in the local market is about 65%.

August imports of LDPE in Kazakhstan decreased to 2,100 tonnes, compared with 2,400 tonnes in July. Imports volumes reduced because of the reduced export quotas from Russian producers and high prices. Total imports of LDPE in the country were 13,400 tonnes in January - August of this year, compared to 9,900 tonnes year on year. Key suppliers of LDPE in the country were Russian producers with a share of about 95% from the total imports.

August imports of LLDPE in Kazakhstan were 400 tonnes, compared with 462 in July. Total LLDPE imports in Kazakhstan were 2,800 tonnes in the first eight months of the year, up 9% year on year. Key suppliers of LLDPE in the country were producers from Asia and Uzbekistan.


MRC

MOSCOW (MRC) - Russia's polyethylene terephthalate (PET) production decreased by 2% compared to the same time a year earlier, according to a ICIS-MRC Price Report.

Despite 90,000 tonnes/year expansion of PET production at Polief, SIBUR group, total volumes of PET production in the country has decreased. The increase of PET production at Polief was offset by the weaker output at Alco-Naphtha, based in Kaliningrad.

August PET production in Russia increased by 9% compared to July. Alco-Naphtha resumed PET production in August, which led to the increase in the production in the country.

At the same time Senege, based in Solnechnogorsk, shut PET production for scheduled maintenance works in the second half of August.
Producer's PET production in August was 2,800 tonnes, down 4,900 tonnes in July.

August PET production at SIBUR-PET remained practically steady, compared with the July level.

Buying activity was sluggish in the Russian PET market in September. Producers and converters reported a significant carryovers of PET chips and finished products at their warehouses.
MRC

MOSCOW (MRC) -- India’s petrochemical industry is working with the government to prepare a "negative" list of duty-free imports of finished plastic goods that are weighing on the profit margins of domestic producers, as per Plastemart.

The domestic market is not able to compete with these imported finished products as the raw materials they use to make similar goods have import duties imposed on them and this has eroded their margins, according to the official from the department of petrochemicals under the ministry of chemicals and fertilizers. The government is now studying duty-free imports of several plastic product categories from countries such as Thailand, Singapore, Vietnam and Malaysia that India has signed free trade agreements (FTAs) with the aim of drawing up the negative list of products to end this situation, the official said.

The review of the existing FTAs and framing a negative list of plastic product imports is also critical for the domestic industry because India is working towards a similar trade agreement with six countries of Gulf Co-operation Council(GCC), one of the largest base of petrochemical majors. It was important to remove such issues involving the import duties before FTA was signed with the GCC, which has larger petrochemical producers, the sources added.

As MRC wrote before, new anti-dumping duties on homopolymer suspension grade PVC imports from Taiwan, Korea, China, the US, Indonesia, Thailand and Malaysia have officially taken effect starting June 13, said the Indian Ministry of Commerce and Industry's statement. According to an official notice issued by the government, new anti-dumping charges levied will stay effective for a period of five years, from 2014 to 2018, unless otherwise stated by the government.
MRC

MOSCOW (MRC) -- Nizhnekamskneftekhim (part of TAIF) has resumed production of its high density polyethylene (HDPE) after a scheduled outage for maintenance, reported MRC analysts.

Nizhnekamskneftekhim, Russia's largest polymers producer, restarted its HDPE production on 28 September after a one-week turnaround. The plant's annual production capacity is 210,000 tonnes. The overall polyethylene production of Nizhnekamskneftekhim totalled 133,900 tonnes over the first eight months of 2014.

Nizhnekamskneftekhim is one of the largest Russian petrochemical companies and is a leader in the production of synthetic rubbers and plastics in Russia. The company's range of products includes more than 100 items, among which are synthetic rubbers of general and special purposes; polystyrene, polypropylene and polyethylene; monomers, which are feedstock for the production of rubbers and plastics.
MRC